In the gig economy, consistent customer tips can help turn an unprofitable side hustle into a valuable source of income. But some Americans aren’t willing to tip all kinds of gig workers.
That's what was found in a new study of over 500,000 US gig drivers from Gridwise, a data-analytics company and app helping drivers track their earnings.Gridwise has a database of anonymized gig-worker data across millions of trips that it used to conduct its analysis — which focused on data from January 2023 to December.
The study found that nearly 90% of food-delivery trips got a customer tip, compared with 75% of grocery-delivery trips and 28% of Uber and Lyft ride-hailing trips. Fifty-one percent of food and grocery drivers’ incomes come from tips, compared with 10% for ride-hailing drivers.
Gridwise data provided to Business Insider showed that ride-hailing drivers' average tips per working hour increased from $1.04 in the first quarter of 2018 to $2.53 in the second quarter of 2022, then gradually fell to $2.06 as of the third quarter of 2023 — the most recent data available.
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In a survey of over 500 gig drivers conducted by Gridwise in November and December as part of its larger study, 78% of gig drivers said tips mattered significantly to their overall incomes.
Past research has found some drivers have faced difficulty earning tips.
A 2019 study of 40 million Uber rides by Stanford and University of Chicago researchers found that 16% of rides received tips — and that only 1% of riders left a tip for every ride.
Additionally, in a Pew Research survey of nearly 12,000 US adults conducted in August, 76% of US adults said they always or often tipped their food-delivery drivers. Sixty-one percent said they did the same for taxi or ride-hailing services.
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Last year, BI spoke with several ride-hailing drivers who said customer tipping had gotten worse in recent years. One theory floated by drivers was that tipping levels normalized after enhanced generosity early in the pandemic. Inflation may also have caused some Americans to tip less. Others may have gotten fed up with tipping after being asked to do it more often — including at the self-checkout line.
Some drivers say Uber and Lyft are partly responsible for poor customer tipping. They said rising trip prices, for instance, had forced some passengers to cut back on tips.
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Last year, an Uber spokesperson told BI that the tipping frequency and the average tip for ride-hailing drivers had roughly doubled over the prior two years. Uber said it had taken steps in recent years to encourage higher tips, including allowing riders to tip during a trip in addition to after.
Lyft didn’t respond to a request for comment.
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One explanation for why Americans are more likely to tip food-delivery drivers over ride-hailing drivers is that many tip them when their order is placed.
For instance, when DoorDash customers place their food-delivery orders, they have the option to leave an up-front tip. This can boost the chance of a driver picking up an order and help get the food delivered faster.
In comparison, customers generally tip their Uber and Lyft drivers during or after a ride.
Are you a gig worker willing to share your story about pay, scheduling, and tipping? If so, reach out to this reporter at [email protected].
